United Cos. Financial May Face Proxy Battle over Poison Pill Strategy

United Companies Financial Corp., a once-high-flying home equity lender, fell to earth last year amid shrinking net interest margins and fraud at its title insurance subsidiary.

The lackluster performance of United Companies stock last year has also sparked the ire of disgruntled shareholders, one of whom has complained publicly about antitakeover provisions adopted by the United Companies board.

Dr. Harry M. Barnes 3d, a cancer specialist based in Montgomery, Ala., said he owns "several thousand" shares of United Companies, which is based in Baton Rouge, La.

Earlier this month, Dr. Barnes wrote a letter to United Companies president and CEO J. Terrell Brown complaining that the company's board had adopted its antitakeover provisions at a time of poor stock performance.

United Companies' board adopted a series of antitakeover provisions in the fourth quarter, including staggered directors' terms limits on filling vacancies, and a 60-day advance notice requirement for shareholder proposals at annual meetings.

In his letter, Dr. Barnes threatened to take his complaints to United Companies shareholders in the form of a proxy vote.

"I'm not a really big shareholder," Dr. Barnes said. "I'm just disappointed the stock has done so poorly. Our perception is that top management has not done quite all they could have to support the company."

"We've received the letter, and we're reviewing it right now to determine the appropriate response," a United Companies spokesman said last Friday. …

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